6 Moves to Make Before Cutting Up Your Credit Card

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Credit card debt got you down? Before you reach for the scissors to cut that plastic in half, consider taking these six steps.

1. Consolidate Your Debt Into a Lower Interest Rate

The first question to ask yourself when contemplating a breakup with your credit cards is "Why?" If it's because you've racked up too much debt — and that's usually the case, isn't it? — there are ways to alleviate some of that pain in the short term. You can consider balance transfer credit cards with introductory 0% interest rates, or low interest credit cards (they're out there if you look hard enough). If you are a homeowner with a mortgage, when you refinance your mortgage, you may be able to get a much lower mortgage rate. (See also: When Should You Do A Balance Transfer to Pay Off Your Credit Cards)

2. Continue Using the Cards — Sparingly

Continuing to use your cards if you're susceptible to impulse buys may not be the best option, but if you can exhibit self-control, it's in your financial interest to keep using the cards regularly. Only charge small amounts that you can pay off immediately.

"If you're looking to take the first step in rebuilding a credit profile once you've paid off a balance, then hold onto your cards and make a minor purchase each month and pay it off entirely the next month," says Mike Catania, a consumer finances expert. "Once you've done this on your cards for a year, then you can safely start closing one per year."

3. Keep the Account Open

An impetuous move when frustrated with your credit situation might be to close the account. Out of sight, out of mind, right? That's true, especially if you have zero access to it; the temptation is gone if there's no active account. But if you have a lot of debt on your credit cards, you don't want to suddenly reduce the amount of available credit you have. Your credit utilization ratio will shoot up, and it will negatively impact your credit score.

"One factor that could result in an immediate impact on your credit score when canceling a credit card is your credit utilization," warns credit expert Nicole Laoutaris. "To maintain a good credit score, it is wise to utilize a maximum 35% of your available credit at any given time. For example, if you have two credit cards, both with a $10,000 credit limit, and between the two have a $6,000 balance, then your credit utilization is 30% ($6,000/$20,000). If you decided to do a balance transfer and cancel one of your credit cards, your credit utilization would rise to 60% ($6,000/$10,000); this is the main way in which canceling a credit card can affect your credit score."

4. Pay Off Any Lingering Balance

Check to see if you still have a balance on the card. Sometimes, when people cut up their credit card, they forget about it altogether. If you have an owing balance, you'll want to pay it off before you forget about it completely. You don't want it sent to collections because you tried to discipline yourself. Or, if you can't eliminate it all in one fell swoop, setup monthly reminders for yourself to pay it off.

5. Work Backward to Delete Traces of the Card

Ensure that your old card's information isn't stored anywhere online, especially at your favorite retailers. Just because the physical card is destroyed, doesn't mean you can't use it. If you're still planning to use this card for certain online bills, take note of them and incorporate these expenses into your budget.

6. Commit Yourself to Positive Financial Accountability

Prevent cutting up your credit card by forcing yourself to be more mindful with your money. I had credit cards in my late teens and early 20s that got me into a lot of trouble. I swore off them in my mid-20s to separate myself from the temptation, but when I felt equipped to adequately handle the responsibility again, I started opening new accounts as I approached my 30s. Know your limits, and hold yourself accountable.

"Many times, people in debt like to live in denial and not check their card balances, look at receipts, etc.," Laoutaris says. "Using an app like Mint is great because it shows you exactly what your cash inflow versus cash outflow is. It's also great at tracking where you're spending your money." (See also: 5 Day Debt Reduction Plan)

Have you ever cut up a credit card? Did it solve your credit woes?